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We ASX investors love our Australian shares. And fair enough too. The S&P/ASX 200 Index (ASX: XJO) has been a great place historically to find great companies to invest your money into for long-term gains. However, like any index, the ASX 200 isn’t perfect. It’s heavy on ASX banks and miners, and light on tech companies. At least where it counts: market-capitalisation weighting.
That’s where the US markets can come in handy. Not only is America home to some of the best companies in the world such as Apple Inc (NASDAQ: AAPL). it also offers ASX investors some exposure to trends and sectors that the ASX 200 just can’t.
So here are 3 ASX exchange-traded funds (ETFs) that have the potential to easily expose any ASX investor’s portfolio to the US markets.
3 ASX ETFs that can offer ASX investors easy US markets exposure
iShares S&P 500 ETF (ASX: IVV)
Here we have a simple, cheap US-based index fund. The S&P 500 Index (INDEXSP: .INX) is one of the largest and most-tracked index in the world. It holds 500 of the largest companies in the US. That’s everything from Apple and Microsoft Corporation (NASDAQ: MSFT) to Ford Motor Company (NYSE: F) and Adobe Inc (NASDAQ: ADBE). This is the index that IVV tracks. This ETF has been an objectively solid performer over the past 10 years, returning an average of 17.93% per annum. it also has one of the lowest management fees of any ETF on the ASX at 0.04% per annum.
BetaShares Nasdaq 100 ETF (ASX: NDQ)
Another US-based index fund here. But instead of the S&P 500, NDQ tracks the Nasdaq-100 (INDEXNASDAQ: NDX). This index is a little different, holding only the companies that list on the Nasdaq exchange. The Nasdaq is one of the major stock exchanges in the US, but it’s a lot newer than its main rival the New York Stock Exchange. As such, it tends to house mostly tech companies. It’s largest holdings are Apple, Microsoft, and other tech giants like Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL), Facebook Inc (NASDAQ: FB) and Netflix Inc (NASDAQ: NFLX).
NDQ charges a management fee of 0.48% per annum, and has retuned an average of 20.94% per annum since its inception in 2015.
VanEck Vectors Morningstar Wide Moat ETF (ASX: MOAT)
This ETF is a little different from the above examples as it is not an index fund. Rather, it can be described as an ‘active ETF’. That’s because it invests in companies that meet certain criteria – that of a wide economic moat. VanEck works with Morningstar to identify a concentrated portfolio of at least 40 US shares that show signs of a ‘wide moat’.
‘Moat’ is a Warren Buffett term that describes a company’s intrinsic competitive advantage. This can be in a powerful brand, cost advantage or other factors that enable a company to stay on top of its competition. Some of MOAT’s top holdings include Pfizer Inc. (NYSE: PFE), Boeing Co (NYSE: BA) and Buffett’s own Berkshire Hathaway Inc. (NYSE: BRK.A)(NYSE: BRK.B). MOAT charges a management fee of 0.49% per annum. It has returned an average of 20.38% per annum since its inception in 2015.
